Members of the now-infamous “meme stock” vigilante subreddit r/WallStreetBets may have found their ultimate target — the mothership itself. The subreddit has been filled with users discussing the prospect of deploying some of the same successful tactics used to pump the stocks of GameStop and AMC earlier this year and apply them to Reddit itself, which just announced its intention to go public.
Reactions to the IPO news weren’t all positive though.
“You either die a hero, or live long enough to become a public company that will monetise the shit out of us,” Reddit user renameCorei said. That fundamental question of whether or not r/WallStreetBet would essentially be monetized from the IPO came up again and again. Users also voiced concerns Reddit’s IPO could welcome a new wave of content censorship on the platform. Meanwhile, others asked the equally important question of whether or not they would be able to buy shares with Reddit karma points
Let’s back up for a moment. Reddit announced it had confidentiality filed an S-1 with the U.S. Securities and Exchange Commission this week but it has yet to decide the number of shares that would be offered or the price range for the offering. This comes less than six months after Reddit reached a valuation of around 10 billion dollars, a hefty price tag driven in large part by the attention the company gained from daily news headlines generated in large part by r/WallStreetBets, the Wall Street Journal notes.
Reddit co-founder and CEO Steve Huffman have previously credited the r/WallStreetBets crew for helping bring in millions of new users and new advertising money to the platform. In August, the company revealed that it had made $US100 ($139) million in advertising revenue in the second quarter of 2021, a huge gain representing a 192% increase from the same time a year before.
“This whole event is showing the power of large communities of everyday people,” Huffman told the Journal at the time. “Not just massive institutional and professional investors get to participate in the stock market.”
Reddit is bulking up as well. Earlier this year the company said it planned to double its staff to around 1,400 employees by the end of 2021, according to The Verge. The IPO will mark a pivotal moment for the company founded in 2005. Reddit was sold to Condé Nast in 2006 for around $US10 ($14) million and then spun off in 2011.
For anyone who forgot, r/WallStreetBets rattled the investment world earlier this year when its members pumped up video game retailer GameStop’s stock, bleeding out some hedge funds along the way. (One of those hedge funds, Square Capital, was forced to shut down earlier this year). Though GameStop was the most memorable case, r/WallStreetBets also had a hand in boosting the stocks of AMC and Blackberry as well.
One thing r/WallStreetBets users are undoubtedly right about is the fact that their fights with hedge funds likely helped drive up Reddit’s valuation. While it would be fitting for those users to use the same tactics to pump up their host’s value, Reddit differs from the likes of Game Stop or Blackberry in that just about everyone else sees its value.